As one of the most closely watched outdoor summits in China, the COA Outdoor Summit at the annual Asia Outdoor Trade Show has always drawn significant attention from the outdoor industry. The 2017 COA Forum was held as scheduled at the Nanjing International Expo Center.
The first session of this year’s summit featured Mr. Sheng Faqiang from Toread, who shared insights on the development path of China’s outdoor brands.
Mr. Sheng began by posing the question—what are the challenges facing domestic outdoor brands? He noted that about four years ago, the domestic outdoor apparel market went through a period of deep adjustment, and in recent years, the growth rate of the outdoor industry has slowed down. According to COA’s forecast data, after 2017, the growth rate of the outdoor industry is expected to increase somewhat. Mr. Sheng also predicted that by 2019, there will be a more noticeable market rebound in the outdoor sector. So why is the industry currently so passive?
Mr. Sheng outlined several key issues facing the outdoor industry: First, the industry has entered its first cyclical adjustment phase. Second, internet marketing has driven down unit prices. Third, the running and fitness boom has had a short-term impact on outdoor activities. Fourth, the diversification of shopping scenarios has led to customer diversion (including offline, online, and group-based micro-businesses). Fifth, product homogenization is severe. Sixth, high growth has resulted in inventory buildup. Seventh, traditional brand communication methods are outdated. Eighth, e-commerce has hit a bottleneck. Beyond these internal issues, competition from related industries has also intensified, with lifestyle brands, the sports industry, and overseas online shopping all becoming strong competitors to the domestic outdoor sector. Competition within the industry is equally fierce. Brand unit prices have dropped noticeably, and low-price positioning brands like Decathlon have captured an increasing share of the market.
What are the challenges that brand companies must address? Mr. Sheng believes that brand differentiation remains an eternal topic—either occupying a unique feature or dominating a specific category. He cited Toread as an example, noting how the brand has segmented its product lines, such as introducing the Discovery brand. Mr. Sheng emphasized that for a domestic outdoor brand, product quality is paramount. Only by focusing on the product can a brand build a solid reputation and create the ultimate product that determines success. Only craftsmanship can revive domestic goods. To this end, Toread has restructured its product center and is developing more top-tier products.
Regarding sales models, Mr. Sheng described new retail as a data-driven, consumer-experience-centered omnichannel retail approach, encompassing physical stores, e-commerce, word-of-mouth marketing, content dissemination, events, and competitions. Engaging with users across multiple dimensions increases complexity for businesses, and only by better serving customers can companies grow in the industry. Holistic marketing has become the future trend. “New production models and smart supply chains” are reshaping the traditional concept of people, place, and product. Through innovations like intelligent logistics and big data, a new people-place-product paradigm creates real-time data flows, enabling quick decisions—whether to clear inventory or restock rapidly. Toread has already experimented with rapid product turnover strategies. The company is also actively building its own event IPs and collaborating with media for promotional efforts. While Toread’s outdoor retail stores still account for 60–70% of its business, Mr. Sheng stressed that traditional channels should not be underestimated, even as the company embraces emerging sales models like e-commerce.
The global development models of outdoor brands also offer valuable lessons for domestic players. The examples cited by Mr. Sheng were all brands that developed their own unique characteristics over time, highlighting the importance of continuously building strengths and distinctive features. For integrated and centralized models, it’s essential that a company’s various sub-brands are interconnected to foster better growth—such as with the VF Group. Mr. Sheng shared insights from the COA delegation’s trip to Japan, focusing on brand survival strategies in an era of low consumption. He used Montbell as an example: the brand primarily operates its own retail stores, and its consistent product quality, one-stop shopping convenience, and customer experience provide an excellent model for domestic outdoor brands. Therefore, domestic companies should embrace diverse approaches in their development.
The Broad Prospects of China’s Outdoor Industry – China’s outdoor sector is just getting started. When compared with several other countries with relatively stable outdoor markets worldwide, China’s outdoor market share is enormous. Sports and health have become part of people’s lifestyles, and the diversification of outdoor activities has opened up more market opportunities. Additionally, the 2022 Winter Olympics have brought significant benefits to the domestic outdoor industry.
In closing, Mr. Sheng summarized the performance of COA, commending the efforts of many team members and affirming the future of China’s outdoor industry.
Return to the roots of brand-building, strengthen fundamentals, and set forth anew.